Variable Annuities: Understanding Investment & Risk

A variable annuity is an annuity that is tied to a managed investment portfolio. The payments are dependent on how well the portfolio does. The risk is shared between the recipient and the insurance company. These annuities are somewhat safer than other kinds of investments because they usually have a minimum payment feature that provides some income, no matter how the investment package does. They are generally not a good option for the risk adverse investor. These types of investments typically invest in equity securities.